Managing diversity: why diversity is a priority

This guide is a practical, informative resource for individuals and organisations who are looking either to develop new policies and strategies relating to diversity or to build on existing frameworks.

The purpose of the guide is to provide quick, accessible information, tips and techniques on diversity. It will also signpost the reader to more detailed sources should further analysis and research be required.

Who is the guide aimed at?

The guide is primarily aimed at human resources (HR) and diversity practitioners across all sectors, with particular appeal to HR/diversity managers in larger organisations and HR directors in smaller companies. Elements of this guide will be relevant to both strategic and operational practitioners, and therefore will add value to both "policy and field" personnel.

Why is diversity important for business?

The past 10 years have seen an enormous increase in the use of the word 'diversity'. At times its use has been rather misplaced or out of context as businesses and individuals have struggled to position diversity on the HR agenda and as a key business issue. However, gradually there has been growing acceptance that diversity is no longer a word that is merely in vogue, but a key business issue that acts as a fundamental differentiator between organisations trying to attract and retain staff and service a broad customer or community population.

What's the difference between equality and diversity?

Prior to defining diversity, it is worth clarifying the relationship between equality (or equal opportunities) and diversity. The recent increase in diversity policies, strategies, and jargon has led many line managers, and a few HR professionals, to ask what's the difference between equality and diversity?'.

The answer is by no means straight-forward, but there does appear to be general agreement over the detail in Figure 1 which compares and contrasts the two areas.

Figure 1 The relationship between equality and diversity

Overall, equality has been very much focused on a compliant HR agenda that ensures fairness, transparency and equity. The diversity agenda takes this further. It too will ensure that social justice and fairness prevail but will take this to a different level regarding the need to value all the differences that people bring to an organisation and how these creative and innovative differences can help achieve organisational objectives.

Many definitions of diversity have been cited. The definition used here (see below) helps to establish the breadth of this area and how through managing diversity organisations can reap the benefits.

Finally, this definition clearly sees the management of diversity as a key area of strategy for organisations as employers of people. There is a broader diversity agenda which factors into the other functions and departments of a business which focus on the inclusivity of the organisations as a supplier of goods or services. This area is gaining increasing strategic importance and can be used as a strong influencing strategy at board level to get senior management engaged.

What are the business reasons for a diversity policy?

The business rationale is discussed in detail in Section 3 , but at this stage, it is worth outlining some of the main business drivers for organisations adopting strategies relating to diversity.

The refreshing element to a lot of these business drivers is that diversity can be seen to add value directly to a business rather than being something that should be seen to be done. These business drivers demonstrate that diversity can add value to both sides of a balance sheet. It can help to generate management cost savings as well as providing the opportunity to develop new and innovative income streams.

How big an issue is managing risk and compliance?

Despite the emergence of positive business drivers, one of the key components of a diversity strategy remains the need to be a fair and equitable employer. Organisations must ensure that internal policies and procedures reflect the requirements of the law, which is developed either through the national government or the European Union. Legal obligations are covered in Section 2 , but the following data helps to reinforce the need for organisations to 'get it right' from a legal perspective, before any of the more creative elements of a diversity strategy are developed:

The data clearly shows that litigation proceedings are still a key area in the management of risk and reputation. While the percentage of successful applicants in the above data is 12 per cent and average awards sit at about £20,000, this hides the considerable reputational risk to organisations, irrespective of a successful defence against any actions brought against them.

Figure 3 The legal cost of poor diversity practices